As expected, Medicare costs will increase in 2020. Additionally, there will be a change in Medigap that will affect those new to Medicare.
Medigap (Medicare Supplement Insurance) Plans in 2020
Medicare has announced that Medigap plans may no longer include the Part B deductible as part of the coverage. As a result, Plans C and F are being phased out. Those already enrolled in these plans may retain them, but that is not an option for new Medicare beneficiaries beginning January 1, 2020. Supplement plans H, I and J became obsolete when it was ruled that Medigap could no longer include prescription drug coverage. In 2020, eight supplement plans will remain available to purchase.
2020 Medicare Insurance Premiums
Beneficiaries who have earned enough credits to receive Part A (hospital insurance) do not pay a premium. Credits are earned through working, and a maximum of four credits can be earned per year. Earning a 40-credit minimum over the course of a lifetime is required for eligibility of premium-free Part A Medicare coverage. For others, the monthly premium will increase from $437 in 2019 to $458 in 2020 if Medicare taxes were paid for under 30 quarters. The premium increases to $252 from $240 if Medicare taxes were paid for 30-39 quarters.
The monthly premium for Part B (medical insurance) is $135.50 in 2019 and is going up to $144.60 in 2020. That is the standard rate. There are several contributing factors that may elevate this rate, such as a certain level of income or a late enrollment penalty. If a higher amount is imposed based on income, this is known as an income-related monthly adjustment amount (IRMAA). If this applies to you, Social Security will mail you a letter of notification.
If you have a Medicare Advantage Plan (Part C), a supplement plan or a drug plan, your plan administrator should notify you of any rate increases.
2020 Medicare Deductibles and Coinsurance
For each benefit period, the deductible for Part A Medicare coverage will be $1,408 in 2020, raised from $1,364 in 2019. The hospital inpatient coinsurance will increase as well. For days 1 to 60, the patient is not responsible for any coinsurance. For days 61 to 90, Medicare recipients currently pay a daily coinsurance amount of $341. In 2020, they will have to pay $352. For day 91 and more, the rate rises from $682 to $704. The 2019 Part B annual deductible amount of $185 is increasing in 2020 to $198.
Informational Resources for Medicare Insurance
During the last quarter of each year, Medicare issues their official U.S. government Medicare handbook, named Medicare & You. To access a paperless version of the handbook, visit the Forms, Help & Resources page of Medicare.gov to download a copy. Prudent Medicare recipients are apt to scrutinize changes as soon as they are announced to guide their decisions for the coming year. It is best to compare plans and reevaluate medical needs before open enrollment begins in case the impact is enough to warrant switching to a different plan. For those new to Medicare insurance, this handbook is a helpful resource for gaining an understanding of Medicare coverage options, terminology, requirements and deadlines.